All Forum Posts by: Matthew Brill

@Zachary Perrin

You can also do a live in flip. Will give you an opportunity to get a feel for how it works, get an owner occupant loan, and give you a better chance to profit on it (buy holding it longer and potentially not paying any capital gains taxes).

You are definitely correct with not getting your money out on rentals not doing a BRRRR. The great returns in RE really come from the appreciation which you won't realize until you refinance, get a HELOC, or sell. That's why it's important to have the cash flow, to being able to ride out the market. The other way to look at it is you are buying a bond, and cash flow stream. If you have all the cash flow you need to support your lifestyle then it doesn't matter nearly as much what you put in dow payments or what your ROI/ROE is. You just have to see what your goals are and the strategize the best way to accomplish them.

I'd look for an agent that understands what you are trying to do. They should help be able to guide you neighborhoods to focus your attention on.

@Lee Hampton makes a great point, applicable multiple markets these days. If you can build for the same price or close to it then it's a much better deal. I have a build to rent property, the cash flow numbers aren't great but it's a great tenant and super low maintenance and head ache early on. Maybe you should connect with Lee and see what he's got going on!

Bradley made some great points above. One thing to consider is that if you go the AirBnB route you will have extra capital upfront to furnish the place. If you are renting out by the room on a standard lease people will likely be furnishing their own room. But from a SFR vs townhome perspective I don't think there is much of a difference (aside from HOA dues and HOA rules). You can try testing some rental adds for room rentals (like on craigslist or fb marketplace) and see what you can generate for interest. You can also check AirDNA to get a sense of what you might get on the STR side.

I wouldn't do it. That is a huge commitment to people that aren't tied to each other. It will definitely put the friendship at risk. It will be tough to keep all the expenses straight (who is responsible for repairing what). Also sounds like a huge headache when it comes to taxes and selling. It would have to be a very thought out and thorough partnership agreement.

You can contact some local property managers and see what the vacancy rates are across their portfolio. Realize this will be very manager dependent and is a function of tenant screening. An easier way it to just anticipate that you will have one month vacancy per year (it shouldn't me more than that if you are doing year leases and getting quality tenants).

How you approach rents will be specific to your market. In my market I list rent a little above what I think market is as it is normal for people to negotiate it lower.

Regarding the bank, being able to talk to a local banker and developing that relationship for future business is nice. Just compare it what the online banks have to offer (fees, terms, conditions). Ultimately just choose what best fits your needs.

As long as the deal makes sense the day you buy it, then it is a good time to buy it.

From the lender's perspective, they will expect you to be moving in once you close. There is some leniency, especially if you are doing a rehab.

First off, I would look to house hack. I have tried to do this every time I have moved to a new area. Then you are decreasing your living expenses while you are there and setting up to have a cash flowing asset if/when you leave. This will de-risk you needing to sell at an inopportune time (like if you buy but the market doesn't appreciate enough by the time you need to leave/sell to recoup costs). Also, during your time there you will be learning about property management to assess if you want to be able to do it from a different state (it is possible). In your time there you will also have the ability to network with local investors/property managers should you want to get professional property management when you move.

You're in the home stretch. It sounds like you will be self managing so I would be focus on brushing up on my property management skills. Getting ready to market the property, research rental rates, screen tenants, get your lease ready.

Converting the detached garage into livable unit would be great. It just becomes a matter of cost and feasibility. I would talk to a few general contractors that do additions/conversions and see what they say. I'm sure it will be possible, just a matter of how much money it will take to make it work. From there, you just need to compare how much it was cost to get it rent ready and how much it will rent for. Just random numbers, but if it costs you $50,000 to do and you rent it for $1000/month that's a 24% annualized cash on cash return. It will then take you 4 years and 2 months to recoup that $50k. It's up to you to determine if that is a good deal or not vs finding an new house hack.